F2Pool has enabled full replace-by-fee

Summary:

Yesterday, F2Pool, the largest pool with 21% of hashing power, enabled full replace-by-fee (RBF) support after discussing it with Peter Todd. This means that transactions F2Pool has will be replaced if a conflicting transaction pays a higher fee. In the short term, very little changes for users. However, long term miner support of full RBF has many advantages for users, allowing them to more efficiently make transactions and pay lower fees. Full RBF also helps use limited blockchain space more efficiently, with up to 90%+ transaction size savings possible in some transaction patterns. Finally, full RBF prevents a number of serious threats to the existing level playing field that miners operate in.On the other hand, F2Pool's decision to enable full RBF is disappointing for some users. It turns double spending into certain profit for scammers and provides no useful benefit for consumers. Wallet software aimed at average users has no ability to reliably detect conditions where an unconfirmed transaction may be double-spent by the sender. Moreover, centralised wallets have planned solutions that are harmful and represent serious threats to Bitcoin's decentralization. Many services have attempted to predict the probability that unconfirmed transactions will be mined, often guaranteeing merchants payment even in the event of a double-spend. Contracting with miners directly is another step that some wallets are taking, but it has a number of serious problems.For businesses that use their own node to verify transactions, this change does not mean much as they are in a similar situation as average users. For those who use a payment processor or transaction API such as Coinbase, BlockCypher, BitPay, etc., whether or not they accept unconfirmed transactions may or may not be guaranteed by their payment processor even when double-spent. If merchants require confirmations prior to accepting orders, nothing changes. Peter Todd, a former Bitcoin Core developer, has recently denied his involvement in launching Sybil attack on the Bitcoin network. In May 2015, Peter Todd had proposed the concept of "First-Seen-Safe Replace-by-Fee" and "Cost savings by using replace-by-fee" on the Bitcoin-development mailing list, which was meant to improve transaction processing and reduce costs. However, in a recent statement, he clarified that his proposals were not related to any Sybil attack.The Sybil attack, which was described in a paper titled "Tampering with the Delivery of Blocks and Transactions in Bitcoin" by Arthur Gervais, Hubert Ritzdorf, Ghassan O. Karame, and Srdjan Capkun, involves creating multiple fake identities to gain control over a network. The references to the sources are also mentioned in the article.Peter Todd's replace-by-fee-tools can be tried out to use full RBF.

Updated on: 2023-06-09T23:52:47.851801+00:00